PENN Entertainment, Inc. 10-Q

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion and analysis of financial condition, results of operations, liquidity and capital resources should be read in conjunction with, and is qualified in its entirety by, the unaudited Consolidated Financial Statements and the notes thereto included in this Quarterly Report on Form 10-Q, and the Consolidated Financial Statements and notes thereto and Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in our Annual Report on Form 10-K for the year ended December 31, 2024. EXECUTIVE OVERVIEW Our Business PENN Entertainment, Inc., together with its subsidiaries (“PENN,” the “Company,” “we,” “our,” or “us”), operates in 28 jurisdictions throughout North America, with a broadly diversified portfolio of casinos, racetracks, and online sports betting and iCasino offerings. PENN’s focus is on organic cross-sell opportunities, reinforced by its market-leading retail casinos, sports media assets and technology, including a proprietary state-of-the-art, fully integrated digital sports betting and iCasino platform, and an in-house iCasino content studio. The Company’s portfolio is further bolstered by its industry-leading PENN Play TM customer loyalty program, offering its over 33 million members a unique set of rewards and experiences. The majority of the real estate assets (i.e., land and buildings) used in our operations are subject to triple net master leases; the most significant of which are with Gaming and Leisure Properties, Inc. (Nasdaq: GLPI) (“GLPI”), a real estate investment trust (“REIT”), and include the AR PENN Master Lease, 2023 Master Lease, and Pinnacle Master Lease (as such terms are defined in Note 7, “Leases” in the notes to the unaudited Consolidated Financial Statements and collectively referred to as the “Master Leases”). Realignment of Digital Strategy On November 6, 2025, PENN announced the mutual decision for an early termination (the “Termination Agreement”) of its Sportsbook Agreement for United States (“U.S.”) online sports betting (“OSB”) with ESPN, Inc. and ESPN Enterprises Inc. (together, “ESPN”). Pursuant to the Termination Agreement, PENN’s exclusive right to use the ESPN BET trademark for OSB in the U.S. will end on December 1, 2025. As a result, we are realigning our digital focus to leverage the strength of our U.S. iCasino and Canadian operations, while continuing to use OSB to drive both the acquisition of customers with significant lifetime value and unique cross-sell opportunities across PENN’s retail and digital assets. We plan to rebrand our OSB offering in the U.S. to theScore Bet, with a target date of December 1, 2025, subject to the receipt of regulatory approvals. We currently operate theScore Bet brand in Ontario, and our OSB product in both the U.S. and Canada will now leverage connectivity with the theScore media app, which has approximately 4 million monthly active users across North America. PENN’s iCasino forward approach has clear long-term alignment to our core business, which will focus on cross-sell opportunities across our ecosystem and enhanced connectivity to our 33 million member PENN Play™ loyalty program. Our OSB offerings will continue to provide top of funnel acquisition and cross-sell opportunities for our Hollywood-branded iCasino, which will remain integrated into our OSB product in states where legal, in addition to serving as a standalone iCasino app. Recent Development Projects On October 10, 2022, the Company announced its intent to pursue four new development projects, including the land-based relocations of Hollywood Casino Joliet (“Joliet”) and Hollywood Casino Aurora (“Aurora”), a second hotel tower at M Resort Spa Casino (“M Resort”), and a new hotel at Hollywood Casino Columbus (“Columbus”). Subsequently, on February 21, 2023, as described in Note 7, “Leases” in the notes to the unaudited Consolidated Financial Statements, the Company and GLPI entered into a master development agreement (the “Master Development Agreement”) related to these development projects. The Master Development Agreement provides that GLPI will fund (i) up to $225.0 million for the relocation of our riverboat casino and related developments with respect to Aurora (the “Aurora Project”); and (ii) upon our request, up to $130.0 million for the relocation of our riverboat casino and related developments with respect to Joliet (the “Joliet Project”), up to $150.0 million for the second hotel tower at M Resort (the “M Resort Project”), up to $70.0 million for the new hotel tower at Columbus (the “Columbus Project” and together with Joliet Project and M Resort Project, the “Other Development Projects,” and together with the Aurora Project, referred to as the “PENN Development Projects”), all within accordance with certain terms and conditions set forth in the Master Development Agreement. GLPI has committed up to $225.0 million in funding for the Aurora Project at a 7.75% cap rate, which we are required to draw and the funding will be structured as rent under the 2023 38 Table of Contents Master Lease (as described in Note 7, “Leases” in the notes to the unaudited Consolidated Financial Statements). Rent within the 2023 Master Lease will increase by a percentage, based on the then-current GLPI stock price, of any project funding received by PENN from GLPI for the Other Development Projects. These funding obligations of GLPI expire on January 1, 2026, provided that (i) for the Columbus Project, if the Company provides notice to GLPI by December 31, 2025 that the Company is electing to receive GLPI funding, the Company shall submit a draw notice for such project by no later than March 31, 2026 requesting to receive GLPI funds by no later than June 30, 2026 and (ii) for the Aurora Project, the Company shall submit a draw notice for such project by no later than March 31, 2026 requesting to receive GLPI funds by no later than June 30, 2026 (altogether, the “GLPI Funding Deadline Extension”). The PENN Development Projects are all subject to necessary regulatory and other government approvals. The Joliet Project to relocate its riverboat casino operations to a new, state-of-the-art land-based facility opened on August 11, 2025. The best-in-class property features approximately 1,000 slots and 43 live table games, including high-limit slots and table games, a baccarat room, and a retail sportsbook. Its unique bars and restaurants include Sorellina by Giada De Laurentiis and Boulevard Food & Drink Hall. Additional features of the new property include an approximately 10,000 square foot, all-ages event center with meeting areas, and approximately 1,330 parking spaces. On August 1, 2025, the Company received the full $130.0 million in committed funding from GLPI for the Joliet Project, resulting in a $10.1 million increase in annual rent, subject to annual escalation pursuant to the 2023 Master Lease. The Aurora Project to relocate its riverboat casino operations to a new, state-of-the-art land-based facility is expected to open in the second quarter of 2026. The land-based casino will feature roughly 1,200 gaming positions, approximately 220 guest rooms, a retail sportsbook, outdoor entertainment area, full-service spa, high-quality bars and restaurants, an approximately 12,000 square foot event center with meeting areas, and approximately 1,700 parking spaces. The Aurora Project included the transfer of certain parcels of land from the City of Aurora, and up to $50.0 million of the project will be funded by the city through a new bond issuance. As of November 5, 2025, we have neither requested nor received any funding from GLPI for the Aurora Project, while the Company has received $13.8 million from the City of Aurora. The second hotel tower at M Resort is expected to open on December 1, 2025. The M Resort Project is expected to add 384 rooms to the Company’s property south of the Las Vegas Strip, bringing its total to 774 rooms and suites. Along with the rooms, there will be expanded meeting space, updated amenities, and additional local partnerships. On November 3, 2025, the Company received the full $150.0 million in committed funding from GLPI for the M Resort Project, resulting in an $11.7 million increase in annual rent, subject to annual escalation pursuant to the 2023 Master Lease. The new, state-of-the-art hotel at Columbus is expected to open in the second quarter of 2026. The hotel is expected to include 180 rooms, meeting space, an additional restaurant, and local partnerships and amenities. As of November 5, 2025, we have neither requested nor received any funding from GLPI for the Columbus Project. On April 24, 2025, the Company announced a development project to relocate its Ameristar Council Bluffs (“ACB”) riverboat casino operations to a new, state-of-the-art land-based property to be rebranded as Hollywood Casino Council Bluffs (“HCCB”). Under the proposed plan, the new HCCB is expected to include roughly 125,000 square feet of new development with approximately 58,000 square feet of gaming space and more than 1,000 positions on a single level. The new facility will complement the existing retail sportsbook, 160-room hotel, and dining options in the landside portion of the current infrastructure. The project is anticipated to cost between $180.0 million and $200.0 million and is expected to take 18-24 months to complete following the design and permitting approval process. GLPI has committed to finance up to $150.0 million at a 7.1% cap rate, which may be structured at PENN’s option as either rent or a 5-year term loan that is prepayable at any time without penalty. Strategic Overview We believe that our portfolio of assets provides us with the benefit of geographically diversified cash flow from operations. We expect to continue to expand our gaming operations through the implementation and execution of a disciplined capital expenditure program at our existing properties, the pursuit of strategic acquisitions and investments, and the development of new gaming properties. Our sports media assets and proprietary online sports betting and iCasino technology reinforce our strategy to continue evolving from the nation’s largest regional gaming operator to a best-in-class omni-channel provider of retail gaming, iCasino, and sports betting entertainment. Additionally, our iCasino forward strategy with long-term alignment to our core business will focus on cross-sell opportunities across our ecosystem and enhanced connectivity to our PENN Play™ loyalty program. 39 Table of Contents Operating and Competitive Environment Most of our properties operate in mature, competitive markets. We expect the majority of our future growth to come from our online sports betting and iCasino businesses; improvements, expansions, or relocations of our existing properties; entrance into new jurisdictions or verticals; expansions of gaming in existing jurisdictions; strategic investments and acquisitions; and cross-sell opportunities between our retail gaming, online sports betting, and iCasino businesses. Our portfolio is comprised largely of well-maintained regional gaming facilities, which has allowed us to develop what we believe to be a solid base for future growth opportunities. We continuously adjust operations, offerings, and cost structures to reflect changing economic conditions, as well as consumer demand and behaviors. We also continue to focus on revenue and cost synergies from recent acquisitions, technology enhancements, and providing customers with additional gaming and entertainment experiences through our differentiated omni-channel strategy. We seek to grow our customer database and PENN Play loyalty program through our iCasino and online sports betting businesses, the development of new properties, the expansion of existing properties and other business lines, and through partnerships with third-party partners, such as Shake Shack Inc., Ticketmaster Entertainment, LLC, Norwegian Cruise Line Holdings Ltd., Live Nation Entertainment, Inc., and Choice Hotels International, Inc. In addition, we believe that our online gaming offerings, combined with other strategic relationships we have, or may develop in the future, should enable us to acquire new customers, expand our player database, and provide additional revenue streams that enhance our omnichannel strategy. The gaming, media, and entertainment industries are characterized by an increasingly high degree of competition among a large number of participants. We compete with a variety of gaming operations, including casinos and hotel casinos of varying quality and size and other gaming options such as state and province-sponsored internet lotteries, sweepstakes, charitable gaming, video gaming terminals at bars, restaurants, taverns and truck stops, historical horse racing gaming terminals, illegal slot machines and skill games, fantasy sports and third-party internet or mobile-based gaming platforms, including both legal and illegal iCasino and sports betting operations, and emerging prediction markets. See the “Segment comparison of the three and nine months ended September 30, 2025 and 2024” section below for discussions on our results of operations by reportable segment. Key Performance Indicators In our business, revenue is driven by discretionary consumer spending. We have no certain mechanism for determining why consumers choose to spend more or less money at our properties or on our online offerings from period-to-period; therefore, we are unable to quantify a dollar amount for each factor that impacts our customers’ spending behaviors. However, based on our experience, we can generally offer some insight into the factors that we believe are likely to account for such changes and which factors may have a greater impact than others. For example, decreases in discretionary consumer spending have historically been brought about by actual or perceived weakened general economic conditions, such as recessions, inflation, rising interest rate environments, tight credit conditions, high unemployment levels, higher income taxes, low levels of consumer confidence, weakness in the housing market, high fuel or other transportation costs, global hostilities, political or social unrest, and the effects of pandemics. In addition, visitation and the volume of play have historically been negatively impacted by significant construction surrounding our properties, adverse regional weather conditions, and natural disasters. In all instances, such insights are based solely on our judgment and professional experience, and no assurance can be given as to the accuracy of our judgments. The majority of our revenues is gaming revenue, which is highly dependent upon the volume and spending levels of customers at our properties. Our gaming revenue is derived primarily from slot machines (which represented approximately 86% and 85% of our gaming revenue for each of the nine months ended September 30, 2025 and 2024) and, to a lesser extent, table games, online sports betting, and iCasino. Aside from gaming revenue, our revenues are primarily derived from our hotel, dining, retail, commissions, program sales, admissions, concessions and certain other ancillary activities, and our racing operations. Key performance indicators related to gaming revenue are slot handle and table game drop, which are volume indicators, and “win” or “hold” percentage. Our typical property slot win percentage is in the range of approximately 5% to 11% of slot handle, and our typical table game hold percentage is in the range of approximately 12% to 29% of table game drop. 40 Table of Contents Slot handle is the gross amount wagered during a given period. The win or hold percentage is the net amount of gaming wins and losses, with liabilities recognized for accruals related to the anticipated payout of progressive jackpots. Given the stability in our slot hold percentages on a historical basis, we have not experienced significant impacts to net income from changes in these percentages. For table games, customers usually purchase chips at the tables. The cash and markers (extensions of credit granted to certain credit-worthy customers) are deposited in the gaming table’s drop box. Table game hold is the amount of drop that is retained and recorded as gaming revenue, with liabilities recognized for funds deposited by customers before gaming play occurs and for unredeemed gaming chips. As we are primarily focused on regional gaming markets, our table game hold percentages are fairly stable as the majority of these markets do not regularly experience high-value play, which can lead to volatility in hold percentages. Therefore, changes in table game hold percentages do not typically have a material impact to our results of operations and cash flows. Key performance indicators related to online gaming revenue, including online sports betting and iCasino, are handle, which is a volume indicator, and “win” or “hold” percentage. Our online sports betting win percentage is in the range of approximately 4.6% to 9.2% of online handle, online slot win percentage is in the range of approximately 4.5% to 4.9% of online slot handle, and our online table game hold percentage is in the range of approximately 1.6% to 2.2% of online table game handle. For online gaming, customers deposit cash into their online accounts for use in online sports betting and iCasino play. Liabilities are recognized for online player account funds that have not been withdrawn and for wagers that have been placed on events that have not yet occurred. Online sportsbook handle is the gross amount wagered during a given period. The win or hold percentage is the net amount of gaming wins and losses, with liabilities recognized for any bonus funds deposited into player accounts. Given that online sports betting wagers are made based on the outcomes of future sporting events, the win or hold percentage can vary based on the bet type (i.e. straight wagers vs. parlay wagers). Online slot handle is the gross amount wagered during a given period. The win or hold percentage is the net amount of gaming wins and losses, with liabilities recognized for accruals related to the anticipated payout of online progressive jackpots. Online table game hold is the amount of handle that is retained and recorded as gaming revenue. Given the stability in our online slot and online table game hold percentages on a historical basis, we have not experienced significant impacts to the results of our operations or cash flows from changes in these percentages. Under normal operating conditions, our properties generate significant operating cash flow since most of our revenue is cash-based from slot machines and table games. Our business is capital intensive and we rely on cash flow from our properties to generate sufficient cash to satisfy our obligations under the Triple Net Leases (as defined in “Liquidity and Capital Resources” ), repay debt, fund maintenance capital expenditures, repurchase our common stock, fund new capital projects at existing properties, and provide excess cash for future development and acquisitions. Additional information regarding our capital projects is discussed in “Liquidity and Capital Resources” below. Reportable Segments We have five reportable segments: Northeast, South, West, Midwest, and Interactive. The Northeast, South, West, and Midwest segments (referred to as our “retail segments”) primarily generate revenue from gaming operations (such as slot machines and table games), food and beverage offerings, and hotel visitation. The Interactive segment includes all of our online sports betting, online casino/iCasino, and social gaming (collectively referred to as “online gaming”) operations, management of retail sports betting, and media operations. Our gaming and racing properties are grouped by geographic location, and each is viewed as an operating segment with the exception of our two properties in Jackpot, Nevada, which are viewed as one operating segment. We consider our combined Video Gaming Terminal (“VGT”) operations, by state, to be separate operating segments. For a listing of our gaming properties and VGT operations included in each reportable segment, see Note 2, “Significant Accounting Policies and Basis of Presentation ” in the notes to the unaudited Consolidated Financial Statements. 41 Table of Contents RESULTS OF OPERATIONS The following table highlights our revenues, net loss, and Adjusted EBITDA, on a consolidated basis, as well as our revenues and Adjusted EBITDAR by reportable segment. Such segment reporting is consistent with how we measure our business and allocate resources internally. We consider net loss to be the most directly comparable financial measure calculated in accordance with generally accepted accounting principles in the United States (“GAAP”) to Consolidated Adjusted EBITDA, which is a non-GAAP financial measure. Refer to “Reportable Segment Measures” below for the definition of Segment Adjusted EBITDAR. Refer to “Non-GAAP Financial Measure” below for the definition of Consolidated Adjusted EBITDA as well as a reconciliation of net loss to Consolidated Adjusted EBITDA. For the three months ended September 30, For the nine months ended September 30, (dollars in millions) 2025 2024 2025 2024 Revenues: Northeast segment $ 690.5 $ 684.8 $ 2,083.0 $ 2,065.8 South segment 291.0 288.1 881.5 884.8 West segment 138.3 131.8 405.7 395.9 Midwest segment 298.3 292.2 878.2 881.5 Interactive segment 297.7 244.6 903.9 684.9 Other (1) 4.1 4.0 15.1 15.9 Intersegment eliminations (2) (2.6) (6.3) (12.6) (19.7) Total $ 1,717.3 $ 1,639.2 $ 5,154.8 $ 4,909.1 Net loss $ (865.1) $ (37.5) $ (771.9) $ (179.5) Segment Adjusted EBITDAR (3) : Northeast segment $ 197.9 $ 199.3 $ 601.6 $ 606.6 South segment 97.7 106.4 305.8 331.3 West segment 51.1 47.5 150.3 144.0 Midwest segment 119.1 118.5 354.7 365.4 Interactive segment (76.6) (90.9) (227.6) (389.7) Other (1) (36.2) (32.4) (110.5) (86.0) Rent expense associated with triple net operating leases (4) (158.1) (154.9) (470.0) (464.6) Consolidated Adjusted EBITDA (5) $ 194.9 $ 193.5 $ 604.3 $ 507.0 (1) The Other category, included in the tables to reconcile the segment information to the consolidated information, consists of the Company’s stand-alone racing operations, namely Sanford-Orlando Kennel Club, Sam Houston and Valley Race Park, the Company’s joint venture interest in Freehold Raceway (which ceased operations on December 28, 2024), and our management contract for Retama Park Racetrack. Expenses incurred for corporate and shared services activities that are directly attributable to a property or are otherwise incurred to support a property are allocated to each property. The Other category also includes corporate overhead, which consists of certain expenses, such as: payroll, professional fees, travel expenses, and other general and administrative expenses that do not directly relate to or have not otherwise been allocated. Corporate overhead was $34.0 million and $29.1 million for the three months ended September 30, 2025 and 2024, respectively, and $108.7 million and $78.5 million for the nine months ended September 30, 2025 and 2024, respectively. Corporate overhead for the three and nine months ended September 30, 2025 include $3.9 million and $21.0 million, respectively, of legal and advisory costs related to activist activity in connection with our 2025 annual meeting of shareholders. (2) Primarily represents the elimination of intersegment revenues associated with our retail sportsbooks, which are operated by PENN Interactive. (3) See definition of “Segment Adjusted EBITDAR” within the “Reportable Segment Measures” section below. (4) Pertains to the following operating leases: (i) AR PENN Master Lease; (ii) 2023 Master Lease; (iii) Margaritaville Lease; and (iv) Greektown Lease. (5) See definition of Consolidated Adjusted EBITDA within the “Non-GAAP Financial Measure” section below. 42 Table of Contents Consolidated comparison of the three and nine months ended September 30, 2025 and 2024 Revenues The following table presents our consolidated revenues: For the three months ended September 30, Change For the nine months ended September 30, Change (dollars in millions) 2025 2024 $ % 2025 2024 $ % Revenues Gaming $ 1,325.2 $ 1,288.0 $ 37.2 2.9 % $ 3,991.2 $ 3,878.6 $ 112.6 2.9 % Food, beverage, hotel, and other 392.1 351.2 40.9 11.6 % 1,163.6 1,030.5 133.1 12.9 % Total revenues $ 1,717.3 $ 1,639.2 $ 78.1 4.8 % $ 5,154.8 $ 4,909.1 $ 245.7 5.0 % Gaming revenues for the three months ended September 30, 2025 increased by $37.2 million, compared to the prior year period, primarily due to an increase in online slot revenues at our Interactive segment. At our retail properties, increases in gaming revenues at our Northeast, West, and Midwest segments were offset by decreases in gaming revenues within our South segment as new supply continues to impact visitation. Gaming revenues for the nine months ended September 30, 2025 increased by $112.6 million, compared to the prior year period, primarily due to an increase in online gaming revenues at our Interactive segment. This increase was due to iCasino and online sports betting growth driven by ongoing product enhancements and decreased promotional expense. Additionally, i ncreases in gaming revenues within our Northeast and West segments were offset by decreases within our South and Midwest segments, as new supply continues to impact visitation. Food, beverage, hotel, and other revenues for the three and nine months ended September 30, 2025 increased by $40.9 million and $133.1 million, respectively, compared to the corresponding prior year periods. For the three and nine months ended September 30, 2025, the increase was primarily due to gaming tax reimbursement amounts related to third-party online sports betting and/or iCasino partners for online sports betting and iCasino market access of $35.4 million and $102.8 million, respectively, compared to the prior year periods. See “Segment comparison of the three and nine months ended September 30, 2025 and 2024” below for more detailed explanations of the fluctuations in revenues. Operating expenses The following table presents our consolidated operating expenses: For the three months ended September 30, Change For the nine months ended September 30, Change (dollars in millions) 2025 2024 $ % 2025 2024 $ % Operating expenses Gaming $ 852.4 $ 826.1 $ 26.3 3.2 % $ 2,575.9 $ 2,576.7 $ (0.8) — % Food, beverage, hotel, and other 284.2 244.4 39.8 16.3 % 831.1 715.2 115.9 16.2 % General and administrative 417.9 392.5 25.4 6.5 % 1,231.2 1,170.1 61.1 5.2 % Depreciation and amortization 114.2 108.7 5.5 5.1 % 332.7 326.5 6.2 1.9 % Impairment losses 825.0 — 825.0 N/M 840.0 — 840.0 N/M Total operating expenses $ 2,493.7 $ 1,571.7 $ 922.0 58.7 % $ 5,810.9 $ 4,788.5 $ 1,022.4 21.4 % N/M - Not meaningful Gaming expenses primarily consist of gaming taxes, payroll, marketing and promotional, and other expenses associated with our gaming operations. Gaming expenses for the three months ended September 30, 2025 increased by $26.3 million, compared to the corresponding prior year period, primarily driven by gaming taxes due to increased online gaming revenue at our Interactive segment, as discussed above. Additionally, for the three months ended September 30, 2025 , gaming expenses increased at our retail properties within our Northeast, West, and Midwest segments due to an increase in gaming revenues. 43 Table of Contents Gaming expenses for the nine months ended September 30, 2025 decreased by $0.8 million, compared to the corresponding prior year period. We incurred additional marketing expenses to support our initial launch of ESPN BET within our Interactive segment during the corresponding prior year period. For the nine months ended September 30, 2025, the decrease was partially offset by an increase in gaming taxes due to increased online gaming revenue at our Interactive segment and increased gaming revenues at our retail properties within our Northeast and West segments, as discussed above. Food, beverage, hotel, and other expenses consist primarily of payroll expenses, costs of goods sold, and other costs associated with our food, beverage, hotel, retail, racing, and Interactive operations. Fo od, beverage, hotel, and other expenses for the three and nine months ended September 30, 2025 increased $39.8 million and $115.9 million, respectively, compared to the corresponding prior year periods, primarily due to increases in gaming tax reimbursement amounts related to third-party online sports betting and/or iCasino partners for online sports betting and iCasino market access. General and administrative expenses include items such as compliance, facility maintenance, utilities, property and liability insurance, surveillance and security, and lobbying expenses, as well as all expenses for administrative departments such as accounting, purchasing, human resources, legal and internal audit. General and administrative expenses also include stock-based compensation expense; pre-opening expenses; acquisition and transaction costs; gains and losses on disposal of assets; insurance recoveries, net of deductible charges; changes in the fair value of our contingent purchase price obligations; expense associated with cash-settled stock-based awards (including changes in fair value thereto); and rent expense associated with our triple net operating leases. For the three and nine months ended September 30, 2025, general and administrative expenses increased by $25.4 million and $61.1 million, respectively, compared to the corresponding prior year periods. The increase is primarily due to legal and advisory costs related to activist activity incurred in connection with our 2025 annual meeting of shareholders of $3.9 million and $21.0 million, respectively, increases in pre-opening expenses of $9.6 million and $14.5 million for the PENN Development Projects, respectively, and increases in stock-based compensation. Impairment loss for the three months ended September 30, 2025, relates to an impairment charge of $825.0 million at our Interactive segment on its goodwill. The impairment resulted from the Company’s realignment of its digital focus following the mutual decision for an early termination of our Sportsbook Agreement with ESPN (as defined in Note 9, “Commitments and Contingencies” ). As part of the realignment, the Company is focusing on the strength of its U.S. iCasino and Canadian operations, while continuing to use online sports betting to drive both the acquisition of customers with significant lifetime value and unique cross-sell opportunities across PENN’s retail and digital assets, and will rebrand its online sports betting offering in the U.S. to theScore Bet, subject to receipt of regulatory approvals. The realignment of its digital focus led the Company to revise its cash flow projections for the Interactive reporting unit and perform a quantitative impairment test, which resulted in a non-cash impairment charge of $825.0 million. See Note 5, “Goodwill and Other Intangible Assets” in the notes to the unaudited Consolidated Financial Statements for further discussion. Impairment losses for the nine months ended September 30, 2025, in addition to the impairment charge at our Interactive segment discussed above, also included an impairment charge of $15.0 million at our ACB property on its trademark as a result of the strategic decision to rebrand ACB. See Note 5, “Goodwill and Other Intangible Assets” in the notes to the unaudited Consolidated Financial Statements for further discussion. There were no impairment losses for the three and nine months ended September 30, 2024. 44 Table of Contents Other income (expenses) The following table presents our consolidated other income (expenses): For the three months ended September 30, Change For the nine months ended September 30, Change (dollars in millions) 2025 2024 $ % 2025 2024 $ % Other income (expenses) Interest expense, net $ (97.2) $ (118.4) $ 21.2 (17.9) % $ (303.9) $ (356.9) $ 53.0 (14.9) % Interest income $ 2.3 $ 6.3 $ (4.0) (63.5) % $ 7.6 $ 19.2 $ (11.6) (60.4) % Income from unconsolidated affiliates $ 8.2 $ 7.1 $ 1.1 15.5 % $ 29.1 $ 22.1 $ 7.0 31.7 % Gain on REIT transaction, net $ 3.3 $ — $ 3.3 N/M $ 3.3 $ — $ 3.3 N/M Gain on financing arrangement $ — $ — $ — N/M $ 215.1 $ — $ 215.1 N/M Loss on early extinguishment of debt $ — $ — $ — N/M $ (11.8) $ — $ (11.8) N/M Other $ — $ 2.8 $ (2.8) N/M $ 4.2 $ 2.5 $ 1.7 68.0 % Income tax benefit (expense) $ (5.3) $ (2.8) $ (2.5) 89.3 % $ (59.4) $ 13.0 $ (72.4) N/M N/M - Not meaningful Interest expense, net decreased by $21.2 million and $53.0 million for the three and nine months ended September 30, 2025, respectively, compared to the corresponding prior year periods. The prior year periods and the first quarter of 2025 included interest expense related to the Company’s financing arrangement, which is described in further detail below in “Gain on financing arrangement.” Additionally, capitalized interest related to the PENN Development Projects increased from the prior year periods. Interest income decreased by $4.0 million and $11.6 million for the three and nine months ended September 30, 2025, respectively, compared to the corresponding prior year periods, primarily due to lower cash balances invested in our money market funds. Income from unconsolidated affiliates relates primarily to our investment in Kansas Entertainment and Freehold Raceway joint ventures. Operations at Freehold Raceway ceased on December 28, 2024. The change in income from the corresponding prior year periods is due to fluctuations in earnings from our investments in these unconsolidated affiliates. Gain on REIT transaction, net relates to the remeasurement of the operating lease liabilities related to the removal of the previously leased Joliet facility assets as part of the 2023 Master Lease modification on August 1, 2025. See Note 7, “Leases” to the unaudited Consolidated Financial Statements for further discussion. Gain on financing arrangement relates to a $215.1 million non-cash gain on a financing arrangement that we entered into in February 2021 with a third-party, which provided the Company with upfront and non-refundable cash proceeds while permitting us to participate in future proceeds on certain insurance coverage claims for economic losses PENN sustained due to the COVID-19 pandemic. During the first quarter of 2025, the Company determined that obligations under these claims are no longer probable and therefore recognized a non-cash gain related to this obligation comprised of cash proceeds received in 2021 of $72.5 million and $142.6 million of accreted non-cash interest. See Note 6, “Long-Term Debt” to the unaudited Consolidated Financial Statements for additional details. Loss on early extinguishment of debt relates to the repurchases of the 2.75% convertible notes due 2026 (the “Convertible Notes”). See Note 6, “Long-Term Debt” to the unaudited Consolidated Financial Statements for further discussion. Other primarily consisted of realized and unrealized gains and losses on equity securities held by PENN Interactive as well as miscellaneous income and expense items. The equity securities were sold during the quarter ended June 30, 2025. Income tax expense was $5.3 million and $2.8 million for the three months ended September 30, 2025 and 2024, respectively, and expense of $59.4 million as compared to a benefit of $13.0 million for the nine months ended September 30, 2025 and 2024, respectively. The effective tax rate (income taxes as a percentage of income from operations before income taxes), including discrete items was (56.7)% and 32.2% for the three and nine months ended September 30, 2025, respectively. 45 Table of Contents We excluded certain foreign losses from our worldwide effective tax rate calculation due to a year-to-date ordinary loss for which no benefit may be recognized. The change in the effective tax rate for the three and nine months ended September 30, 2025, as compared to the corresponding prior periods was primarily due to: (i) excluding certain foreign losses for which no tax benefit can be recognized in our worldwide effective tax rate calculation; (ii) non-deductible permanent items; (iii) state taxes; and (iv) changes to the valuation allowance. See Note 8, “Income Taxes” to the unaudited Consolidated Financial Statements for additional details. Our effective income tax rate may vary each reporting period depending on, among other factors, the geographic and business mix of our earnings, changes to our valuation allowances, and the level of our tax credits. These and other factors, including our history and projections of pre-tax earnings, are considered in assessing the realizability of our net deferred tax assets. On January 16, 2025, the Indiana Supreme Court heard oral arguments between the Company and the Indiana Department of State Revenue on notices of proposed assessments for tax years 2015 through 2017. The Company believes that it is reasonably possible that its current unrecognized tax reserve may change within the next twelve months. On July 4, 2025, the One Big Beautiful Bill Act (“OBBB”) was enacted. Key business income tax provisions of the OBBB applicable to the Company include (i) reinstatement of immediate deduction for domestic research or experimental expenditures; (ii) extension of 100% accelerated tax bonus depreciation for qualifying depreciable assets; and (iii) restoration of the favorable EBITDA-based business interest expense limitation. The impacts of the OBBB are reflected in our results for the quarter and did not have a material impact on the Company’s effective tax rate for the three and nine months ended September 30, 2025. The Company expects a beneficial reduction to cash tax liability; however, we will continue to assess the potential impact on our financial results and strategy. 46 Table of Contents Segment comparison of the three and nine months ended September 30, 2025 and 2024 Northeast Segment For the three months ended September 30, Change For the nine months ended September 30, Change (dollars in millions) 2025 2024 $ % 2025 2024 $ % Revenues Gaming $ 617.2 $ 609.9 $ 7.3 1.2 % $ 1,863.5 $ 1,850.3 $ 13.2 0.7 % Food, beverage, hotel, and other 73.3 74.9 (1.6) (2.1) % 219.5 215.5 4.0 1.9 % Total revenues $ 690.5 $ 684.8 $ 5.7 0.8 % $ 2,083.0 $ 2,065.8 $ 17.2 0.8 % Adjusted EBITDAR $ 197.9 $ 199.3 $ (1.4) (0.7) % $ 601.6 $ 606.6 $ (5.0) (0.8) % Adjusted EBITDAR margin 28.7 % 29.1 % -40 bps 28.9 % 29.4 % -50 bps The Northeast segment’s revenues for the three months ended September 30, 2025 increased by $5.7 million, compared to the prior year period, primarily due to an increase in gaming revenues, particularly slots revenues, offset by a decrease in hotel revenue. The Northeast segment’s revenues for the nine months ended September 30, 2025 increased $17.2 million, compared to the prior year period, primarily due to an increase in gaming revenues, particularly slots revenues, as well as an increase to food and beverage revenue. For the three months ended September 30, 2025, the Northeast segment’s Adjusted EBITDAR decreased $1.4 million and A djusted EBITDAR margin decreased to 28.7% primarily due to increased labor costs. For the nine months ended September 30, 2025, the Northeast segment’s Adjusted EBITDAR decreased $5.0 million and A djusted EBITDAR margin decreased to 28.9%, primarily due to increases in general and administrative expenses. South Segment For the three months ended September 30, Change For the nine months ended September 30, Change (dollars in millions) 2025 2024 $ % 2025 2024 $ % Revenues Gaming $ 215.2 $ 220.2 $ (5.0) (2.3) % $ 660.8 $ 684.2 $ (23.4) (3.4) % Food, beverage, hotel, and other 75.8 67.9 7.9 11.6 % 220.7 200.6 20.1 10.0 % Total revenues $ 291.0 $ 288.1 $ 2.9 1.0 % $ 881.5 $ 884.8 $ (3.3) (0.4) % Adjusted EBITDAR $ 97.7 $ 106.4 $ (8.7) (8.2) % $ 305.8 $ 331.3 $ (25.5) (7.7) % Adjusted EBITDAR margin 33.6 % 36.9 % -330 bps 34.7 % 37.4 % -270 bps The South segment’s revenues for the three months ended September 30, 2025 increased by $2.9 million, compared to the prior year period, primarily due to an increase in revenue from non-gaming amenities, partially offset by a decrease in gaming revenues at the South segment properties impacted by new supply . The South segment’s revenues for the nine months ended September 30, 2025 decreased by $3.3 million, compared to the prior year period, primarily due to a decrease in gaming revenues as increased competition negatively impacted several of our properties, partially offset by an increase in food, beverage, hotel, and other revenues. For the three and nine months ended September 30, 2025, the South segment’s Adjusted EBITDAR decreased $8.7 million and $25.5 million , respectively, and Adjusted EBITDAR margin decreased to 33.6% and 34.7% , respectively, primarily due to the decreases in gaming revenues discussed above, and increased labor costs. 47 Table of Contents West Segment For the three months ended September 30, Change For the nine months ended September 30, Change (dollars in millions) 2025 2024 $ % 2025 2024 $ % Revenues Gaming $ 98.4 $ 89.8 $ 8.6 9.6 % $ 287.2 $ 275.9 $ 11.3 4.1 % Food, beverage, hotel, and other 39.9 42.0 (2.1) (5.0) % 118.5 120.0 (1.5) (1.3) % Total revenues $ 138.3 $ 131.8 $ 6.5 4.9 % $ 405.7 $ 395.9 $ 9.8 2.5 % Adjusted EBITDAR $ 51.1 $ 47.5 $ 3.6 7.6 % $ 150.3 $ 144.0 $ 6.3 4.4 % Adjusted EBITDAR margin 36.9 % 36.0 % 90 bps 37.0 % 36.4 % 60 bps The West segment’s revenues for the three and nine months ended September 30, 2025 increased by $6.5 million and $9.8 million , respectively, compared to the corresponding prior year periods, primarily due to increased gaming revenues, partially offset by a decrease in food, beverage, hotel, and other revenues. For the three and nine months ended September 30, 2025, the West segment’s Adjusted EBITDAR increased $3.6 million and $6.3 million, respectively, and Adjusted EBITDAR margin increased to 36.9% and 37.0%, respectively, primarily due to the increases in gaming revenues discussed above. Midwest Segment For the three months ended September 30, Change For the nine months ended September 30, Change (dollars in millions) 2025 2024 $ % 2025 2024 $ % Revenues Gaming $ 265.1 $ 259.1 $ 6.0 2.3 % $ 781.3 $ 784.7 $ (3.4) (0.4) % Food, beverage, hotel, and other 33.2 33.1 0.1 0.3 % 96.9 96.8 0.1 0.1 % Total revenues $ 298.3 $ 292.2 $ 6.1 2.1 % $ 878.2 $ 881.5 $ (3.3) (0.4) % Adjusted EBITDAR $ 119.1 $ 118.5 $ 0.6 0.5 % $ 354.7 $ 365.4 $ (10.7) (2.9) % Adjusted EBITDAR margin 39.9 % 40.6 % -70 bps 40.4 % 41.5 % -110 bps The Midwest segment’s revenues for the three months ended September 30, 2025 increased by $6.1 million, compared to the prior year period, primarily due to an increase in gaming revenues, particularly slots revenues. The Midwest segment’s revenues for the nine months ended September 30, 2025 decreased by $3.3 million, compared to the prior year period, primarily due to a decrease in gaming revenues as increased competition negatively impacted visitation at several of our properties. Severe weather events in the first quarter of 2025 also contributed to the decrease in visitation. For the three months ended September 30, 2025, the Midwest segment’s Adjusted EBITDAR increased $0.6 million due to the increase in gaming revenues discussed above. A djusted EBITDAR margin decreased to 39.9% primarily due to increased labor costs. For the nine months ended September 30, 2025, the Midwest segment’s Adjusted EBITDAR decreased $10.7 million and A djusted EBITDAR margin decreased to 40.4%, primarily due to the decrease in gaming revenues discussed above, and increased labor costs. 48 Table of Contents Interactive Segment For the three months ended September 30, Change For the nine months ended September 30, Change (dollars in millions) 2025 2024 $ % 2025 2024 $ % Revenues Gaming $ 129.3 $ 109.0 $ 20.3 18.6 % $ 398.4 $ 283.5 $ 114.9 40.5 % Food, beverage, hotel, and other (1) 168.4 135.6 32.8 24.2 % 505.5 401.4 104.1 25.9 % Total revenues $ 297.7 $ 244.6 $ 53.1 21.7 % $ 903.9 $ 684.9 $ 219.0 32.0 % Adjusted EBITDA $ (76.6) $ (90.9) $ 14.3 (15.7) % $ (227.6) $ (389.7) $ 162.1 (41.6) % Adjusted EBITDA margin (25.7) % (37.2) % N/M (25.2) % (56.9) % N/M (1) - “Food, beverage, hotel, and other” only includes “other” revenue. N/M - Not meaningful The Interactive segment’s revenues for the three and nine months ended September 30, 2025 increased by $53.1 million and $219.0 million, respectively, compared to the corresponding prior year periods, primarily due to an increase in gaming revenues and other revenues. Gaming revenues were positively impacted by growth in our Hollywood-branded iCasino and theScore Bet iCasino apps, and higher slot product mix improving hold rates. O nline sports betting growth was driven by ongoing product enhancements. Other revenues are inclusive of gaming tax amounts related to third-party online sports betting and/or iCasino partners for online sports betting and iCasino market access of $139.5 million and $104.1 million for the three months ended September 30, 2025 and 2024, respectively, and $405.6 million and $302.8 million for the nine months ended September 30, 2025 and 2024, respectively. For the three and nine months ended September 30, 2025, the Interactive segment’s Adjusted EBITDA and Adjusted EBITDA margin increased primarily due to the increase in gaming revenues, discussed above, and a decrease in marketing expense. Other For the three months ended September 30, Change For the nine months ended September 30, Change (dollars in millions) 2025 2024 $ % 2025 2024 $ % Revenues Food, beverage, hotel, and other $ 4.1 $ 4.0 $ 0.1 2.5 % $ 15.1 $ 15.9 $ (0.8) (5.0) % Total revenues $ 4.1 $ 4.0 $ 0.1 2.5 % $ 15.1 $ 15.9 $ (0.8) (5.0) % Adjusted EBITDAR $ (36.2) $ (32.4) $ (3.8) 11.7 % $ (110.5) $ (86.0) $ (24.5) 28.5 % Other consists of the Company’s stand-alone racing operations, as well as corporate overhead expenses, which primarily includes certain expenses such as payroll, professional f ees, travel expenses, and other general and administrative expenses that do not directly relate to or have not otherwise been allocated. Revenues for the three months ended September 30, 2025 remained relatively flat compared to the prior year period. Revenues for the nine months ended September 30, 2025 decreased slightly compared to the prior year period, primarily due to fluctuations in racing revenues. Corporate overhead expenses were $34.0 million and $29.1 million for the three months ended September 30, 2025 and 2024, respectively, and $108.7 million and $78.5 million for the nine months ended September 30, 2025 and 2024, respectively. Corporate overhead expenses for the three and nine months ended September 30, 2025 include $3.9 million and $21.0 million, respectively, of legal and advisory costs related to activist activity in connection with our 2025 annual meeting of shareholders. Changes in Adjusted EBITDAR for the three and nine months ended September 30, 2025 primarily relate to increased general and administrative costs, inclusive of the $3.9 million and $21.0 million, respectively, of legal and advisory costs as described above. 49 Table of Contents Reportable Segment Measures Segment Adjusted EBITDAR is our measure of profit or loss for our reportable segments and underlying operating segments. We define Segment Adjusted EBITDAR as earnings before interest expense, net, interest income, income taxes, depreciation and amortization, stock-based compensation, debt extinguishment charges, impairment losses, insurance recoveries, net of deductible charges, changes in the estimated fair value of our contingent purchase price obligations, gain or loss on disposal of assets, the difference between budget and actual expense for cash-settled stock-based awards, pre-opening expenses, loss on disposal of a business, non-cash gains/losses associated with REIT transactions, and other. Segment Adjusted EBITDAR excludes rent expense associated with triple net operating leases (which is a normal, recurring cash operating expense necessary to operate our business). Segment Adjusted EBITDAR is inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (such as interest expense, net, and depreciation and amortization) added back for our Kansas Entertainment, LLC joint venture. Segment Adjusted EBITDAR margin is Segment Adjusted EBITDAR divided by related segment revenues. Non-GAAP Financial Measure Use and Definitions In addition to GAAP financial measures, management uses Consolidated Adjusted EBITDA as a non-GAAP financial measure. This non-GAAP financial measure should not be considered a substitute for, nor superior to, financial results and measures determined or calculated in accordance with GAAP. This non-GAAP financial measure is not calculated in the same manner by all companies and, accordingly, may not be an appropriate measure of comparing performance among different companies. We define Consolidated Adjusted EBITDA as earnings before interest expense, net, interest income, income taxes, depreciation and amortization, stock-based compensation, debt extinguishment charges, impairment losses, insurance recoveries, net of deductible charges, changes in the estimated fair value of our contingent purchase price obligations, gain or loss on disposal of assets, the difference between budget and actual expense for cash-settled stock-based awards, pre-opening expenses, loss on disposal of business, non-cash gains/losses associated with REIT transactions, and other. Consolidated Adjusted EBITDA is inclusive of income or loss from unconsolidated affiliates, with our share of non-operating items (such as interest expense, net, and depreciation and amortization) added back for our Kansas Entertainment, LLC joint venture. Consolidated Adjusted EBITDA is inclusive of rent expense associated with our triple net operating leases with our REIT landlords. Although Consolidated Adjusted EBITDA includes rent expense associated with our triple net operating leases, we believe Consolidated Adjusted EBITDA is useful as a supplemental measure in evaluating the performance of our consolidated results of operations. Consolidated Adjusted EBITDA has economic substance because it is used by management as a performance measure to analyze the performance of our business, and is especially relevant in evaluating large, long-lived casino-hotel projects because it provides a perspective on the current effects of operating decisions separated from the substantial non-operational depreciation charges and financing costs of such projects. We present Consolidated Adjusted EBITDA because it is used by some investors and creditors as an indicator of the strength and performance of ongoing business operations, including our ability to service debt, and to fund capital expenditures, acquisitions and operations. These calculations are commonly used as a basis for investors, analysts, and credit rating agencies to evaluate and compare operating performance and value companies within our industry. In order to view the operations of their casinos on a more stand-alone basis, gaming companies, including us, have historically excluded from their Consolidated Adjusted EBITDA calculations certain corporate expenses that do not relate to the management of specific casino properties. However, Consolidated Adjusted EBITDA is not a measure of performance or liquidity calculated in accordance with GAAP. Consolidated Adjusted EBITDA information is presented as a supplemental disclosure, as management believes that it is a commonly used measure of performance in the gaming industry and that it is considered by many to be a key indicator of the Company’s operating results. 50 Table of Contents Reconciliation of GAAP Financial Measures to Non-GAAP Financial Measure The following table includes a reconciliation of net loss, which is determined in accordance with GAAP, to Consolidated Adjusted EBITDA, which is a non-GAAP financial measure: For the three months ended September 30, For the nine months ended September 30, (dollars in millions) 2025 2024 2025 2024 Net loss $ (865.1) $ (37.5) $ (771.9) $ (179.5) Income tax (benefit) expense 5.3 2.8 59.4 (13.0) Interest expense, net 97.2 118.4 303.9 356.9 Interest income (2.3) (6.3) (7.6) (19.2) Income from unconsolidated affiliates (8.2) (7.1) (29.1) (22.1) Gain on REIT transaction, net (3.3) — (3.3) — Gain on financing arrangement — — (215.1) — Loss on early extinguishment of debt — — 11.8 — Other income — (2.8) (4.2) (2.5) Operating income (loss) (776.4) 67.5 (656.1) 120.6 Stock-based compensation (1) 16.8 12.9 48.5 39.0 Cash-settled stock-based award variance (1)(2) (2.9) (3.8) (9.2) (14.9) Loss (gain) on disposal of assets (1) (1.5) (0.1) (1.2) 8.8 Pre-opening expenses (1) 9.6 — 14.5 — Depreciation and amortization 114.2 108.7 332.7 326.5 Impairment losses (3) 825.0 — 840.0 — Income from unconsolidated affiliates 8.2 7.1 29.1 22.1 Non-operating items of equity method investments (4) 1.1 1.1 3.3 3.2 Other expenses (1) 0.8 0.1 2.7 1.7 Consolidated Adjusted EBITDA $ 194.9 $ 193.5 $ 604.3 $ 507.0 ( 1) These items are included in “General and administrative” within the unaudited Consolidated Statements of Operations. (2) Our cash-settled stock-based awards are adjusted to fair value each reporting period based primarily on the price of the Company’s common stock. As such, significant fluctuations in the price of the Company’s common stock during any reporting period could cause significant variances to budget on cash-settled stock-based awards. (3) Includes impairment charges of $15.0 million in the Midwest segment and $825.0 million in the Interactive segment. See Note 5, “Goodwill and Other Intangible Assets.” (4) Consists primarily of depreciation expense associated with our Kansas Entertainment joint venture. 51 Table of Contents LIQUIDITY AND CAPITAL RESOURCES Our primary sources of liquidity and capital resources have been and are expected to be cash flow from operations, borrowings from banks, and proceeds from the issuance of debt and equity securities. Our ongoing liquidity will depend on a number of factors, including available cash resources, cash flow from operations, acquisitions or investments, funding of construction for development projects, and our compliance with covenants contained under our debt agreements. We currently believe that our operating cash flow and other sources of liquidity, as described herein, will be sufficient to meet our liquidity needs on a short and long-term basis. For the nine months ended September 30, Change (dollars in millions) 2025 2024 $ % Net cash provided by operating activities $ 401.0 $ 256.4 $ 144.6 56.4 % Net cash used in investing activities $ (303.3) $ (312.7) $ 9.4 (3.0) % Net cash used in financing activities $ (129.0) $ (175.0) $ 46.0 (26.3) % Operating Cash Flow Trends in our operating cash flows tend to follow trends in operating loss, excluding non-cash charges, but can be affected by changes in working capital, the timing of significant interest payments, tax payments or refunds, and distributions from unconsolidated affiliates. Net cash provided by operating activities increased by $144.6 million for the nine months ended September 30, 2025, primarily due to an increase in our reportable segments’ Adjusted EBITDAR. Investing Cash Flow Cash used in investing activities during the nine months ended September 30, 2025 and September 30, 2024, was $303.3 million and $312.7 million, respectively, and primarily related to capital expenditures of $457.3 million and $261.7 million, respectively. Cash used in investing activities during the nine months ended September 30, 2025 was partially offset by the receipt of the full $130.0 million in committed funding from GLPI for the sale-and-lease back of real estate assets of the new Joliet facility, as discussed below. Capital Expenditures Capital expenditures are accounted for as either project capital (new facilities or expansions) or maintenance (replacement) which is inclusive of projects such as our retail sportsbooks, our cashless, cardless and contactless technology and hotel renovations. Cash provided by operating activities, as well as cash available under our Amended Revolving Credit Facility, was available to fund our capital expenditures for the nine months ended September 30, 2025 and 2024, as applicable. For the year ending December 31, 2025, we anticipate capi tal expenditures of approximately $255.0 million, inclusive of capital expenditures required under our Triple Net Leases, which require us to spend a specified percentage of total revenues, and capital expenditures of $133.2 million incurred during the nine months ended September 30, 2025. Additionally, f or the year ending December 31, 2025 , we anticipate capital project expenditures of $430.0 million, the majority of which are in connection with the PENN Development Projects pursuant to our Master Development Agreement with GLPI (as described in Note 7, “Leases” in the notes to the unaudited Consolidated Financial Statements). During the nine months ended September 30, 2025, we incurred capital expenditures of $324.1 million primarily in connection with the PENN Development Projects. The Master Development Agreement provides that GLPI will fund up to $225.0 million for the Aurora Project and, upon PENN’s request, up to $130.0 million for the Joliet Project and up to $220.0 million in the aggregate for the Columbus Project and the M Resort Project, in accordance with certain terms and conditions set forth in the Master Development Agreement. The PENN Development Projects are all subject to necessary regulatory and other government approvals. On August 1, 2025, the Company received the full $130.0 million in committed funding from GLPI for the Joliet Project which opened on August 11, 2025, and on November 3, 2025, the Company received the full $150.0 million in committed funding from GLPI for the M Resort Project, of which the new hotel tower is expected to open on December 1, 2025. We have neither requested nor received any funding from GLPI for the Aurora Project or Columbus Project. 52 Table of Contents Financing Cash Flow For the nine months ended September 30, 2025, net cash used in financing activities totaled $129.0 million, primarily related to repurchases of $223.8 million of our Convertible Notes, repurchases of our common stock of $269.4 million, principal payments of $72.2 million on our finance leases and financing obligations, $27.1 million in payments on insurance financing, as well as $28.2 million in principal payments on long-term debt, partially offset by net proceeds from our revolving credit facility of $510.0 million. For the nine months ended September 30, 2024, net cash used in financing activities totaled $175.0 million, primarily related to principal payments of $68.0 million on our finance leases and financing obligations, $30.5 million in indemnification payments, $28.6 million in payments on insurance financing, as well as $28.2 million in principal payments on long-term debt. As of September 30, 2025, we had $2.9 billion in aggregate principal amount of indebtedness, including $1.9 billion outstanding under our Amended Credit Facilities, $400.0 million outstanding under our 5.625% Notes, $400.0 million outstanding under our 4.125% Notes, $106.7 million outstanding under our Convertible Notes, and $8.6 million outstanding in other long-term obligations. We ha d $510.0 million drawn on our Amended Revolving Credit Facility. See definitions for (i) Amended Credit Facilities; (ii) 5.625% Notes; (iii) 4.125% Notes; and (iv) Amended Revolving Credit Facility in Note 6, “Long-Term Debt” in the notes to the unaudited Consolidated Financial Statements. With the exception of the Convertible Notes, which we expect to refinance on a long-term basis, we have no other debt maturing before January 2027. As of November 5, 2025, the Company had $500.0 million in outstanding borrowings under its Amended Revolving Credit Facility, resulting in $476.1 million in available borrowing capacity. Covenants Our Amended Credit Facilities, 5.625% Notes, and 4.125% Notes require us, among other obligations, to maintain specified financial ratios and to satisfy certain financial tests. In addition, our Amended Credit Facilities, 5.625% Notes, and 4.125% Notes, restrict, among other things, our ability to incur additional indebtedness, incur guarantee obligations, amend debt instruments, pay dividends, create liens on assets, make investments, engage in mergers or consolidations, and otherwise restrict corporate activities. Our debt agreements also contain customary events of default, including cross-default provisions that require us to meet certain requirements under the Master Leases. If we are unable to meet our financial covenants or in the event of a cross-default, it could trigger an acceleration of payment terms. As of September 30, 2025, the Company was in compliance with all required financial covenants. The Company believes that it will remain in compliance with all of its required financial covenants for at least the next twelve months following the date of filing this Quarterly Report on Form 10-Q with the SEC. See Note 6, “Long-Term Debt” in the notes to the unaudited Consolidated Financial Statements for additional information of the Company’s debt and other long-term obligations. Share Repurchase Authorization On December 6, 2022, the Board of Directors approved a share repurchase authorization for $750.0 million (the “December 2022 Authorization”), which expires on December 31, 2025. On October 30, 2025, the Board of Directors approved a new $750.0 million share repurchase program (the “October 2025 Authorization”), subject to the finalization of and entry into the Termination Agreement and the Investment Agreement Amendment, both of which are defined and discussed in Note 9, “Commitments and Contingencies” in the notes to the unaudited Consolidated Financial Statements. The October 2025 Authorization commences on January 1, 2026 and expires on December 31, 2028 and will take effect after the Company’s existing $750.0 million share repurchase program expires on December 31, 2025. Repurchases by the Company are subject to available liquidity, general market and economic conditions, alternate uses for the capital, and other factors. Share repurchases may be made from time to time through a Rule 10b5-1 trading plan, open market transactions, block trades or in private transactions in accordance with applicable securities laws and regulations and other legal requirements. There is no minimum number of shares that the Company is required to repurchase and the repurchase authorization may be suspended or discontinued at any time without prior notice. During the nine months ended September 30, 2025, the Company repurchased 15,214,631 shares of its common stock in open market transactions for $269.4 million at an average price of $17.70 per share. 53 Table of Contents Subsequent to the quarter ended September 30, 2025, the Company repurchased 4,876,200 shares of its common stock at an average price of $17.44 per share for an aggregate amount of $85.0 million. As of November 5, 2025, the remaining availability under our December 2022 Authorization was $395.4 million. The cost of all repurchased shares is recorded as “Treasury stock” within the unaudited Consolidated Balance Sheets. Other Factors Affecting Liquidity ESPN BET Sportsbook Agreement On November 5, 2025, PENN and ESPN entered into the Termination Agreement, pursuant to which PENN’s exclusive right to use the ESPN BET trademark for online sports betting in the U.S. will terminate on December 1, 2025. The Termination Agreement provides that PENN will pay ESPN a total of $38.1 million in the fourth quarter of 2025 in respect of all remaining fees owed through the Termination Date. In addition, PENN has agreed to pay ESPN a total of $5.0 million following the Termination Date for traditional media to support theScore Bet and/or Hollywood iCasino offerings. The Termination Agreement provides that these payments will settle all outstanding payment obligations from PENN to ESPN under the Sportsbook Agreement. See N ote 9 , “Commitments and Contingencies” in the notes to the unaudited Consolidated Financial Statements for additional information. Triple Net Leases The majority of the real estate assets (i.e., land and buildings) used in our operations are subject to triple net master leases; the most significant of which are the Master Leases with GLPI. We refer to the Master Leases, the Margaritaville Lease, the Greektown Lease, and the Morgantown Lease, collectively, as our “Triple Net Leases.” The Company’s Triple Net Leases are accounted for as either operating leases, finance leases, or financing obligations. On February 21, 2023, as described in Note 7, “Leases” in the notes to the unaudited Consolidated Financial Statements, the Company and GLPI entered into the Master Development Agreement. The Master Development Agreement contains additional rent (together with the 2023 Master Lease base rent, the “2023 Master Lease Rent”) equal to (i) 7.75% of any project funding received by PENN from GLPI for the Aurora Project; and (ii) a percentage, based on the then-current GLPI stock price, of any project funding received by PENN from GLPI for the Other Development Projects. The Master Development Agreement provides that GLPI will fund up to $225.0 million for the Aurora Project and, upon PENN’s request, up to $130.0 million for the Joliet Project, up to $150.0 million for the M Resort Project, and up to $70.0 million for the Columbus Project, in accordance with certain terms and conditions set forth in the Master Development Agreement. These funding obligations of GLPI expire on January 1, 2026, subject to the GLPI Funding Deadline Extension. Our new Joliet facility opened on August 11, 2025, the new hotel tower at the M Resort is expected to open December 1, 2025, and the new Aurora facility and the Columbus hotel tower are expected to open in the second quarter of 2026. The PENN Development Projects are all subject to necessary regulatory and other government approvals. As of November 5, 2025, the Company has received the full $130.0 million in committed funding from GLPI for the Joliet Project, as well as the full $150.0 million in committed funding from GLPI for the M Resort Project. We have neither requested nor received any funding from GLPI for the Aurora Project or Columbus Project. The sale-and-lease back of real estate assets related to the new Joliet facility to GLPI for $130.0 million and the new M Resort tower for $150.0 million resulted in increased annual rent under the 2023 Master Lease by $10.1 million, and $11.7 million, respectively. These increases are subject to annual escalation in accordance with the terms of the 2023 Master Lease. Under our Triple Net Leases, in addition to lease payments for the real estate assets, we are required to pay the following, among other things: (i) all facility maintenance; (ii) all insurance required in connection with the leased properties and the business conducted on the leased properties; (iii) taxes levied on or with respect to the leased properties (other than taxes on the income of the lessor); (iv) all tenant capital improvements; and (v) all utilities and other services necessary or appropriate for the leased properties and the business conducted on the leased properties. Additionally, our Triple Net Leases are subject to annual escalators and periodic percentage rent resets, as applicable. See Note 7, “Leases” in the notes to the unaudited Consolidated Financial Statements for further discussion and disclosure related to the Company’s leases. 54 Table of Contents Payments to our REIT Landlords under Triple Net Leases Total payments made to our REIT Landlords, GLPI and VICI, were as follows: For the three months ended September 30, For the nine months ended September 30, (in millions) 2025 2024 2025 2024 AR PENN Master Lease $ 72.0 $ 71.0 $ 216.1 $ 212.9 2023 Master Lease 61.5 58.9 181.1 176.7 Pinnacle Master Lease 87.4 87.4 262.2 259.3 Margaritaville Lease 6.7 6.7 20.1 20.1 Greektown Lease 13.5 13.2 40.0 39.6 Morgantown Lease 0.8 0.8 2.4 2.4 Total $ 241.9 $ 238.0 $ 721.9 $ 711.0 Outlook Based on our current level of operations, we believe that cash generated from operations and cash on hand, together with amounts available under our Amended Credit Facilities, will be adequate to meet our anticipated obligations under our Triple Net Leases, debt service requirements, capital expenditures and working capital needs for the foreseeable future. However, our ability to generate sufficient cash flow from operations will depend on a range of economic, competitive, and business factors, many of which are outside our control. We cannot be certain: (i) of the impact of price inflation, changes in interest rates on the U.S. economy, changes in trade policies, economic downturns or uncertainty, and geopolitical uncertainty; (ii) that our anticipated earnings projections will be realized; (iii) that we will achieve the expected synergies from our acquisitions and joint ventures; and (iv) that future borrowings will be available under our Amended Credit Facilities or otherwise will be available in the credit markets to enable us to service our indebtedness or to make anticipated capital expenditures. We caution that the performance and trends seen across our portfolio may not continue. In addition, while we anticipate that a significant amount of our future growth would come through the pursuit of opportunities within other distribution channels, such as media, retail and online gaming; from acquisitions of gaming properties at reasonable valuations; greenfield projects; development projects; and jurisdictional expansions and property expansion in under-penetrated markets; there can be no assurance that this will be the case. If we consummate significant acquisitions in the future or undertake any significant property expansions, our cash requirements may increase significantly, and we may need to make additional borrowings or complete equity or debt financings to meet these requirements. See Part I, Item 1A. “Risk Factors” of the Company’s Form 10-K for the year ended December 31, 2024 for a discussion of additional risks, including risks related to the Company’s capital structure. We have historically maintained a capital structure comprised of a mix of equity and debt financing. We vary our leverage to pursue opportunities in the marketplace in an effort to maximize our enterprise value for our shareholders. We expect to meet our debt obligations as they come due through internally-generated funds from operations and/or refinancing them through the debt or equity markets prior to their maturity. CRITICAL ACCOUNTING ESTIMATES A complete discussion of our critical accounting estimates is included in our Form 10-K for the year ended December 31, 2024. Other than discussed below, there have been no significant changes in our critical accounting estimates during the nine months ended September 30, 2025. Interactive goodwill During the quarter ended September 30, 2025, management identified a goodwill impairment triggering event and, as such, performed a quantitative analysis. See Note 5, “Goodwill and Other Intangible Assets” in the notes to the unaudited Consolidated Financial Statements for further discussion. For our quantitative goodwill impairment test, an income approach, in which a discounted cash flow (“DCF”) model was utilized, and a market-based approach using guideline public company multiples of earnings before interest, taxes, depreciation, and amortization (“EBITDA”) from the segment’s peer group was utilized in order to estimate the fair market value of the reporting unit. The Company compared the fair value of the segment’s reporting unit to its carrying amount. As the carrying amount of the reporting unit exceeded the fair value, an impairment was recorded equal to the amount of the excess, which was $825.0 million. 55 Table of Contents The evaluation of goodwill requires the use of estimates about future operating results of the reporting unit to determine the estimated fair value of the reporting unit. The Company must make various assumptions and estimates in performing its impairment testing. The implied fair value includes estimates of future cash flows that are based on reasonable and supportable assumptions which represent the Company’s best estimates of the cash flows expected to result from the use of the assets including their eventual disposition. Significant assumptions utilized in the estimation of future cash flows for the reporting unit include forecasted revenues, forecasted operating expenses, the discount rate used in the valuation, and the terminal year EBITDA exit multiple. These significant assumptions are complex and subjective. They are sensitive to changes in underlying assumptions and can be affected by a variety of factors, including external factors, such as industry, geopolitical and economic trends, and internal factors, such as changes in the Company’s business strategy, which may re-allocate capital and resources to different or new opportunities which management believes will enhance its overall value but may be to the detriment of the Interactive reporting unit. Changes in estimates, increases in the Company’s cost of capital, reductions in transaction multiples, changes in operating and capital expenditure assumptions, or application of alternative assumptions and definitions could produce significantly different results. Future cash flow estimates are, by their nature, subjective and actual results may differ materially from the Company’s estimates. If our ongoing estimates of future cash flows are not met, we may have to record further impairment charges in future periods. Our estimates of cash flows are based on the current regulatory and economic climates, recent operating information, and budgets of the reporting unit. These estimates could be negatively impacted by changes in federal, state, provincial, or local regulations, economic downturns, or other events affecting our Interactive segment. Forecasted cash flows can be significantly impacted by the local economies in which our Interactive reporting unit operates. Increases in unemployment rates, inflation and/or interest rates can also result in decreased customer activity and/or lower customer spend. Additionally, increases in gaming taxes approved by state and provincial regulatory bodies can negatively impact forecasted cash flows. The goodwill at our Interactive reporting unit was subject to a sensitivity analysis to determine the potential additional impairment loss: Amount of impairment loss as a result of: (dollars in millions) Carrying Amount Passing Margin a 10% decrease in forecasted revenues and EBITDA Goodwill PENN Interactive $766.0 — % $105.0 RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS For information with respect to new accounting pronouncements and the impact of these pronouncements on the unaudited Consolidated Financial Statements, see Note 3, “New Accounting Pronouncements” in the notes to the unaudited Consolidated Financial Statements. 56 Table of Contents IMPORTANT FACTORS REGARDING FORWARD-LOOKING STATEMENTS This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These statements can be identified by the use of forward-looking terminology such as “expects,” “believes,” “estimates,” “projects,” “intends,” “plans,” “goal,” “seeks,” “may,” “will,” “should,” “look forward to,” or “anticipates” or the negative or other variations of these or similar words, or by discussions of future events, strategies or risks and uncertainties. Specifically, forward-looking statements include, but are not limited to, statements regarding: the Company’s expectations of future results of operations and financial condition, including, but not limited to, the Company’s expectations regarding the rebranding of our U.S. OSB product to theScore Bet and the future success of theScore Bet, Hollywood iCasino and its other digital offerings; the Company’s expectations with respect to share repurchases; the Company’s expectations with respect to the integration and synergies related to the Company’s integration of theScore and the continued growth and monetization of the Company’s media business; the Company’s expectations that its portfolio of assets provides a benefit of geographically-diversified cash flows from operations; management’s plans and strategies for future operations, including statements relating to the Company’s plan to expand gaming operations through the implementation and execution of a disciplined capital expenditure program at our existing properties, the pursuit of strategic acquisitions and investments, and the development of new gaming properties, including the development projects and the anticipated benefits; improvements, expansions, or relocations of our existing properties; entrance into new jurisdictions; expansion of gaming in existing jurisdictions; strategic investments and acquisitions; cross-sell opportunities between our retail gaming, online sports betting, and iCasino businesses; our ability to obtain financing for our development projects on attractive terms; the timing, cost and expected impact of planned capital expenditures on the Company’s results of operations; and the actions of regulatory, legislative, executive, or judicial decisions at the federal, state, provincial, or local level with regard to our business and the impact of any such actions. Such statements are all subject to risks, uncertainties and changes in circumstances that could significantly affect the Company’s future financial results and business. Accordingly, the Company cautions that the forward-looking statements contained herein are qualified by important factors that could cause actual results to differ materially from those reflected by such statements. Such factors include: the effects of economic and market conditions in the markets in which the Company operates or otherwise, including the impact of global supply chain disruptions, price inflation, changes in interest rates, economic downturns, changes in trade policies, and geopolitical and regulatory uncertainty; competition with other retail and online gaming and sports betting, entertainment and sports content experiences; the timing, cost and expected impact of product and technology investments; risks relating to operations, permits, licenses, financings, approvals and other contingencies in connection with growth in new or existing jurisdictions; our ability to successfully acquire and integrate new properties and operations and achieve expected synergies from acquisitions; the availability of future borrowings under our Amended Credit Facilities or other sources of capital to enable us to service our indebtedness, make anticipated capital expenditures or pay off or refinance our indebtedness prior to maturity; the impact of indemnification obligations under the Barstool SPA; our ability to realize the anticipated benefits of our iCasino forward strategy and the rebranding of our U.S. online sports betting product to theScore Bet; our ability to attract and retain user adoption of theScore Bet and Hollywood iCasino apps in a rapidly evolving and highly competitive market; the impact of the termination of the Sportsbook Agreement; the outcome of any legal proceedings that may be instituted against the Company, or its respective directors, officers or employees; the ability of the Company to retain and hire key personnel; the impact of new or changes in current laws, regulations, rules or other industry standards; the impact of activist shareholders; adverse outcomes of litigation involving the Company, including litigation brought by activist shareholders; our ability to maintain our gaming licenses and concessions and comply with applicable gaming law, changes in current laws, regulations, rules or other industry standards, and additional factors described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, subsequent Quarterly Reports on Form 10-Q and Current Reports on Form 8-K, each as filed with the U.S. Securities and Exchange Commission. The Company does not intend to update publicly any forward-looking statements except as required by law. Considering these risks, uncertainties and assumptions, the forward-looking events discussed in this Quarterly Report on Form 10-Q may not occur.